CLW G7

What is the purpose of Majority Rule?

• to define its relationship with shareholders and it specifies the objectives for which the company has been formed.

• It preserves the right of the majority to decide how the affairs of the company shall be conducted

• to maintains the majority's right to decide how the company's affairs should be run

• a decision rule that selects alternatives which have a majority, that is, more than half the votes

The related case in Majority rule is Foss V Harbottle

• TRUE

• FALSE

What is NOT the exception in the Rule of Foss V Harbottle

• Ultra Vires

• Personal rights

• Transactions requiring special majorities

• Violations of directors' fiduciary duty

Which one of the following is NOT advantage of Majority Rule

• Multiplicity of futile suits can be avoided

• Litigation at suit of a minority is futile

• Recognition of the separate legal personality of a company

• When company does an illegal / ultra vires

When is the minority at disadvantage?

• When company does an illegal act / ultra vires

• When individual rights of the plaintiff have been infringed

• Where majority is committing a fraud on the minority

• All of the above

Unfair prejudice is when the situations in which majority rule shareholders, many of whom are usually executives, act in ways that jeopardize the minority.

• FALSE

• TRUE

Which one of these is the purpose of Company Act Amendment 2016 Order?

• Increase the protection of minority shareholders' interests in a company

• To take money from investors and generate profits on their investments.

• To obtain reasonable assurance about whether the financial statements

Which one of the following is NOT the power of court?

• Order the company to execute an act

• Order the business to regulate its future behavior

• Allow the company from executing an act

• Order the company to acquire your shares at a fair market value.